The rapid advancement of digitalisation in the restaurant sector

In recent years, the push for digitisation has rapidly gained momentum across various sectors; however, it has impacted hospitality, and restaurants need to keep up with the advances to stay competitive and utilise the tech to manage costs and customer experience.

The rise of digitalisation can be observed in shifting consumer habits, with a notable uptake in preferences for online ordering, delivery services, and the emergence of dark kitchens. These trends have set the stage for omnichannel business models that require a robust digital presence. Furthermore, leveraging the latest restaurant technology has become essential to ensure viable and profitable operations.

While there have been challenges such as supply issues and food and energy inflation, these obstacles have only accentuated the need for cost reduction, efficiency, and innovation through digital solutions.

The pace at which brands are adopting new technology is impressive. In this article, I share how technology continues to reshape the hospitality sector and explore its promising potential for the future.

Over recent decades, the world's restaurant sector has undergone significant changes, largely driven by the digital revolution. As technological progress continues to accelerate, countless eateries are leveraging it to boost operational efficiency and address the shifting expectations of today's digital-first consumers. These digital adaptations manifest in restaurants' tangible realm and online presence.

A prominent example of this digital integration within restaurant spaces is the adoption of self-ordering kiosks. These devices streamline order processing, compile valuable customer insights, curtail workforce expenses, and minimise order discrepancies. In fact, by 2020, the worldwide interactive kiosk industry was valued at an impressive 26.63 billion U.S. dollars, with projections for further growth. The past years underscored the importance of these kiosks, as health concerns necessitated minimal human-to-human contact, paralleling the rise of contactless payment methods. Notably, the Far East and China dominated this contactless payment arena, contributing to nearly half of its global value, with North America and Europe trailing behind.

Surge in Online Food Delivery

The pandemic era also saw a surge in online food orders. In 2020, the worldwide online food delivery market's worth touched 111.32 billion U.S. dollars. This escalation was driven, in part, by the pandemic's restriction on indoor dining. The U.S. witnessed an astounding growth rate of 123% in this domain, with Russia and Canada following suit.

Additionally, the rise of online ordering paved the way for the expansion of the "ghost kitchen" concept. These establishments, known as dark, cloud, or virtual kitchens, operate without a traditional dine-in or take-out framework. Their primary business model centres on partnering with food delivery platforms like Grubhub or accepting orders through their websites and phone calls. Astonishingly, in 2019, the global valuation of the ghost kitchen market stood at 43.1 billion U.S. dollars, with an anticipated leap to 71.4 billion U.S. dollars by 2027.

Technological Preferences: Businesses vs. Consumers

From a business perspective, technological choices are often geared towards amplifying sales and fostering customer loyalty. A 2020 survey of North American food establishments highlighted their top tech priorities: creating a seamless blend of physical, digital, and mobile shopping experiences, fostering customer loyalty through personalised experiences, and enhancing automation for better efficiency and quality. Interestingly, though relevant for consumers, eco-friendly or sustainable technologies ranked low for businesses, as they didn't directly impact sales or brand loyalty.

Conversely, from the consumer's vantage point in the U.S., drive-through services and touchless mobile payments topped the list of essential restaurant technologies. In contrast, loyalty programs, which businesses hold in high regard, resonated less with the dining public.

Dining with technology: An In-depth overview

The fusion of technology in the dining world is revolutionising food preparation, service, and how consumers interact with establishments. This technological footprint spans numerous aspects of our operations and can be segmented as follows:

1.?????Client-Facing Solutions:?Interactive kiosks, tableside tablets, and digital menus enhance dining experiences.

2.?????Augmented Reality (AR):?Interactive digital overlays on menus allow customers to visualise di gamified dining experiences before ordering or offering.

3.?????Virtual Reality (VR):?Immersive training modules for staff or virtual dining experiences for patrons.

4.?????Loyalty and Feedback Systems:?Digital platforms collect customer feedback, offer rewards, and promote return visits.

5.?????Order & Delivery Systems:?Platforms enabling digital food ordering, payment, pickup, or home deliveries.

6.?????Payment Innovations:?Contactless payments, mobile wallets, and cryptocurrency acceptance to diversify payment methods.

7.?????POS Systems:?Integrated tools to document sales, process payments, and offer customer insights.

8.?????Artificial Intelligence (AI):?Predictive algorithms for menu suggestions, chatbots for customer inquiries, and data analysis for trend forecasting.

9.?????Robotic Solutions:?Automation in food preparation, robotic servers, and drone deliveries.

10.??Administrative Tools:?Software assisting in inventory management, staff scheduling, and performance analytics for managerial oversight.

11.??Sustainability Tech:?Solutions monitoring energy use, waste production, and sourcing local produce, helping restaurants become more eco-friendly.

The continuous integration of these technologies enhances operational efficiency and amplifies the overall dining experience for customers.

What is the purpose of integrating technology and software solutions in restaurants?

Many sophisticated restaurant chains leverage technology tailored for the hospitality industry to meet diverse needs and optimise several facets of their operations. The primary goals include:

Enhancing guest experience by:

·?????? Offering value-added services to customers

·?????? Addressing challenges faced by customers during their visit

·?????? Elevating the level of service received by guests

Boosting revenue by:

·?????? Facilitating upselling to increase average spends per customer

·?????? Enhancing staff knowledge about products

·?????? Minimising obstacles for seamless reordering

Optimising cost management by:

·?????? Efficiently managing the workforce and scheduling

·?????? Supervising purchases and cost calculations

·?????? Implementing preventive maintenance strategies

·?????? Improving inventory management

Efficiently streamlining processes by:

·?????? Minimising administrative tasks

·?????? Ensuring completion of crucial tasks

·?????? Maintaining compliance with regulations

·?????? Reducing reliance on paper and manual inputs

Engaging and understanding customers by:

·?????? Gathering guest feedback and engaging in direct communication

·?????? Experimenting with new products and tracking customer preferences

Fostering team engagement by:

·?????? Implementing digital communication within teams

·?????? Analysing employee sentiment

·?????? Empowering staff to manage their data and simplify requests for rewards and recognition

Encouraging customer loyalty by:

·?????? Promoting return visits through special offers and discounts

The omnichannel era persists.

When in-person dining venues faced closures, the hospitality industry quickly pivoted to explore alternative business avenues. The rapid embrace of digital solutions during this time has since solidified as standard practice, with off-site dining progressively surpassing the traditional in-restaurant experience.?

Modern consumers desire flexibility in their food choices, looking for options to order anytime, anywhere. This can be via the restaurant's website, a third-party delivery service, a QR-coded table or digital kiosk within the restaurant, and even through platforms like WhatsApp or voice commands to Google, Siri and Alexa.

However, this shift is about more than just catering to consumer preferences. Adopting an omnichannel approach has become crucial for food service establishments to boost revenue, maximise kitchen efficiency, gain deeper customer insights, and foster brand loyalty.

Decline in third-party delivery platforms' popularity.

The delivery sector continues its upward trajectory. Even supermarkets have tapped into this trend, offering home delivery services capitalising on the undeniable convenience of one-click shopping. The delivery sector in the UK has been experiencing significant growth, mirroring global trends. Before the pandemic, food delivery was already on the rise, but the onset of COVID-19 supercharged its growth. Many Britons turned to delivery services during lockdowns, both for meals and grocery shopping. Companies like Deliveroo, Eat, and Uber Eats reported increased orders and expanded their service areas. Major UK supermarkets like Tesco, Sainsbury's, and Morrisons also ramped up their home delivery capacities to meet the surge in demand.

By 2021, the UK's online food delivery market was valued at several billion pounds and proved to grow further in 2022 and 2023. This rise was not only due to convenience but also technological innovations, the expansion of delivery areas, and the diversification of offerings.

Major restaurant chains and fast-food giants are increasingly managing their delivery operations. This move helps them bypass hefty commissions from third-party aggregators and offers greater control over customer experience, enabling them to provide a unique service. Meanwhile, challenges like global controversies regarding driver contracts and working conditions have further escalated costs for these platforms.

However, there's a silver lining for smaller restaurant entities. They stand to gain more with diminished competition in the third-party delivery space.?

Digital-only dining brands

The concept of virtual kitchens, born from pandemic-induced necessities, continues to flourish as brands aim to boost their revenues and market presence. Moreover, those companies managing their virtual kitchens and proprietary online ordering platforms gain direct access to invaluable customer data. This eliminates reliance on third-party platforms and amplifies their digital marketing capabilities.

By operating multiple culinary concepts from a single kitchen, businesses can optimise space usage, diversify their menu, and reduce operational expenses. This model proved to be a lifeline for many during the challenging times of the pandemic, and its relevance persists today with the shift in dining behaviours. Notably, some pub chains have also adopted this model, viewing it as an additional revenue stream for their establishments.

Digital outreach: a key to thriving

Achieving omnichannel proficiency takes time and effort, especially for renowned brands traditionally associated with dine-in services. Many QSR brands revamped their digital landscape for seamless integration across platforms, whether customers order via mobile, in-store kiosk, or their website, streamlining the experience across global markets. This was a project that I closely drove with Burger King MENA region over three years during the pandemic and post-pandemic.

The Power of positive feedback

Customer feedback holds immense sway as consumers utilise positive reviews to decide their trust in a business, with many basing their restaurant choices on peer-reviewed platforms. Interestingly, consumers tend to spend more at establishments that garner exceptional reviews; even I am guilty of this.

A comprehensive online presence is essential for omnichannel success.

Prospective customers might encounter your brand through myriad online avenues, including your official website, app, Google My Business, third-party delivery interfaces, social platforms like Facebook and Instagram, or review sites like TripAdvisor.

It's imperative to offer consistent information, branding, menu details, and pricing across these platforms. Nurturing a robust digital image demands undivided attention. Couple this with the task of sifting through countless reviews, which becomes a monumental undertaking. Neglecting your digital footprint can result in lost clientele, diminished revenue, and, more critically, a tarnished reputation, which can be a daunting challenge to redress.

Robotics in hospitality: cost-cutter or workforce replacement?

Given the ongoing challenges of staffing in the hospitality sector, there's growing speculation about the role of robots in bridging the employment gap. As the costs of robotic technology decrease and staffing shortages persist, restaurants are increasingly considering automation. But is robotic integration a feasible alternative to human staff, and are the savings worth the investment?

Dining with droids

A noteworthy trend in the hospitality sector is using robotics in restaurants. Factors like escalating labour expenses, industry-wide worker shortages, soaring rent, and high staff attrition rates push restaurateurs to explore automation for mundane, repetitive tasks to cut labour costs. Some restaurants now boastfully automated services delivered by AI-driven robots. I trialled these bots at Burger King in Saudi Arabia, which, although a good technological idea and a little gimmicky, we found that the efficiency could not yet reduce labour costs as the tech had yet to reach optimal performance.

Impact of robots on guest experience

Prioritising exceptional guest experiences remains paramount for modern hospitality enterprises. It serves as a distinctive edge in an intensely competitive landscape where consumers dine out less but expect top-tier quality when they do.

You may have read some of my previous LinkedIn posts, which stress that factors like service standards, ambience, price, and quality dominate the customer experience; not all restaurant tasks are deemed fit for automation. Guests view tasks like table cleaning, menu information, and order-taking as robot-suitable. Conversely, cooking and direct food service still need to be considered more appropriate for robots as people prefer the human touch.

Yet, from a business standpoint, relying on robots for tasks like menu explanations and order placements could curtail the potential for upsells. However, it's noteworthy that specific cooking processes are already being automated in fast-food giants like Chipotle.

Can robots elevate the fine dining experience?

The allure of fine dining lies in its exquisite offerings and unparalleled service, with customers who are prepared to spend more, expecting nothing but the best. A genuine human touch is pivotal, especially when it comes to welcoming guests, seating them, introducing the menu and delicacies, catering to their preferences, upselling, and seeking feedback. In the culinary world of fine dining, where chefs meticulously craft each dish from scratch, it's challenging to envision robots replacing these culinary artists, at least in the foreseeable future. I am yet to be able to add these types of robotics to Chotto Matte, as the concept is driven heavily by the human experience in offering a high level of service.

How do robots impact the dining journey?

With rising food and energy expenses, businesses are constantly seeking ways to trim costs without compromising on the quality of service and the memorable experiences they offer to their customers. A stellar customer experience can amplify brand loyalty, foster word-of-mouth promotion, and elevate overall spending and gratuities.

Holistic digital engagement in the restaurant sphere

While omnichannel approaches are revered in marketing, many presume it's reserved exclusively for e-commerce businesses. However, this perspective requires broadening. Given the distinctive nature of restaurant operations, how these strategies can be applied is only sometimes evident. Still, in the modern digital era, numerous restaurants are expanding their reach across diverse platforms. By leveraging tools like email and SMS, forward-thinking restaurant proprietors are transitioning from mere multichannel techniques to holistic omnichannel approaches.

Decoding omnichannel engagement for restaurants

At its core, omnichannel marketing presents customers with a unified shopping journey, whether using a mobile app, desktop, or even placing an order in person. The restaurant domain implements this principle by offering various ordering modalities. Beyond proprietary apps, orders might come through calls or external delivery platforms.

Though the terms "omnichannel" and "multichannel" often seem interchangeable, they entail distinct dynamics. Let's delve deeper.

The impetus behind omnichannel engagement in restaurants

While eateries don't function identically to regular retail outlets, the omnichannel rewards remain consistent. This customer-centric paradigm ensures uniformity across all interfaces. For instance, in a traditional multichannel framework, each platform operates in silos. An app-loyal customer making a telephonic order might feel like starting from scratch. Omnichannel setups, conversely, revolve around the customer, ensuring a familiar, personalised experience across all platforms, thereby nurturing enduring customer relationships.

To master this holistic strategy, consider these pivotal guidelines:

Uphold brand integrity

Your restaurant is more than its name or the dishes on the menu. It embodies an ethos, ambience, and unique communication style. As you transition to an omnichannel framework, ensuring uniformity in brand persona across platforms is paramount. This consistency isn't merely about aesthetics but tone, voice, and messaging—especially on platforms like social media, which often form the initial customer touchpoint.

Harness the power of analytics.

While data plays an instrumental role across sectors, it's particularly vital for omnichannel endeavours. By offering insights into customer preferences, analytics can guide you towards an ultra-tailored dining journey for patrons. Beyond recalling names or past orders, it's about leveraging predictive analytics to enrich the dining experience.

Optimise email & and SMS for customer relationship management

Fostering customer relationships is a sure-fire way to ensure repeat business. In the omnichannel restaurant realm, email and SMS emerge as potent tools for this. Tailored messaging—birthday greetings or special offers—sent at optimal times can foster deeper connections. Moreover, these platforms can be harnessed to garner invaluable feedback, ensuring you remain agile in addressing customer sentiments.

Nurture brand advocates via social media

In today's digital landscape, peer opinions carry weight. With many consumers being more inclined to purchase based on social media recommendations, leveraging this "social proof" is vital. You can amplify your restaurant's reach and resonance by engaging with genuine brand advocates.

Technological efficiencies enhance customer satisfaction:

Digital training - cost-efficient and standardised

Switching to digital training platforms, like the system we use at Chotto Matte, Steak and Company and Angus Steakhouse called CPL, ensures uniformity in brand standards, irrespective of the outlet. Through the CPL?app, staff can access concise, interactive learning modules at their convenience, translating to substantial savings on training. Enhanced product awareness can boost revenue via upselling, motivating the team and enhancing profit margins. The outcome? Superior service without denting the budget.

Innovative workforce management - Optimise labour costs.

Efficient shift scheduling maintains impeccable service standards and curtails labour expenses. While staff shortages pose a challenge, AI-infused rota planning, in which we use a platform called TENZO for Chotto Matte, Steak and Company and Angus Steakhouse, predicts sales trends based on time, season, last year's performance, forecasted weather and other historical trends to suggest ideal staffing numbers tailored to fluctuating demands.

The restaurant sector is transforming, with digitalisation and technological innovations at its forefront. From enhancing guest experiences to boosting revenue and streamlining processes, technology has emerged as an indispensable ally in the hospitality industry.?

The advent of robotics and AI, combined with an omnichannel approach, signifies the industry's direction. However, striking a balance between human touch and automation remains crucial. Amid these changes, one constant remains: the unparalleled significance of exceptional customer service. As the sector evolves, restaurants must stay abreast of the latest trends, harnessing technology's full potential while preserving the essence of hospitality.

The fast-food industry has always been adaptive, rooted in its core promise of speedy service. To enhance this, they've continuously integrated automation. Lately, the emphasis has shifted to crafting superior “customer experiences,” leading to a holistic omnichannel method of serving patrons.

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The IoT technology is central to this omnichannel vision, powering innovations like self-ordering terminals, dynamic menu displays, automated drive-thrus, and locker-based delivery systems. As consumers seek tailored experiences, opting for convenience in how and when they shop, fast-food chains have risen to the occasion.

The essence of this industry can be distilled into one principle: convenience. Whether ordering or receiving food, they've covered all angles: in-store, drive-thru, online, mobile apps, pre-orders, and more. Offering a variety of pickup and delivery options, these chains epitomise the omnichannel philosophy. Additionally, automation in order-taking introduces fresh avenues for sales and marketing.

The term "frictionless retail" has evolved from just making processes smoother to eliminating obstacles. This is especially evident in payment methods, which have transitioned from cash to card to contactless. The advent of mobile payments, digital wallets, and e-gift cards has streamlined payment options.

Moreover, fast-food chains leverage mobile devices beyond app-based ordering and payments. With loyalty programs, they're curating personalised suggestions based on user behaviour and preferences. Today’s consumers are perpetually online, especially on social media, so brands are shifting away from traditional advertising to cater to instant dining choices.

Recognising that the upcoming generation is tech-savvy, restaurants must weave technology into every facet of the customer journey. This guarantees a seamless experience aligning with future patrons' expectations.

Drive-thrus are undergoing a tech makeover, too. Chains like Sonic are experimenting with voice-activated ordering, ensuring quicker service accuracy and enabling staff to focus on enhancing hospitality.

Modern data analytics empower these restaurants to tailor in-store and virtual experiences further. Restaurants now employ digital menu boards with predictive analytics, adjusting content based on variables like weather, location, or time. For instance, a McDonald’s in Hawaii might promote hot beverages on a chilly day or dynamically switch menu highlights from breakfast to lunch. Facial recognition allows the scan of the room to target the audience and adjust digital menu boards to promote meals that target the audience in the restaurant. For example, if the restaurant is full of families with young children, the menu boards promote kids' meals and family promotions.

The fast-food sector remains a beacon of innovation in the retail world. With a commitment to omnichannel strategies powered by automation, they're leading by the adage of catering to individual preferences. For industry enthusiasts, it's a delightful evolution to witness.

Wrapping up: omnichannel engagement in restaurants

Embracing a holistic digital engagement strategy ensures that restaurants remain at the forefront of customer consciousness. With advanced email and SMS platforms now catering to the nuanced needs of the food industry, restaurants can consistently offer delightful experiences. The result? Enhanced customer rapport, increased brand visibility, and a loyal customer base, leading to elevated sales and brand credibility.

#innovation #management #digitalmarketing #technology #creativity #futurism #marketing #strategy #business #inspiration #SavvyIQ #Tech

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